Nov 10, 2015
Hong Kong's Chow Tai Fook Jewellery sees 40-50 pct fall in H1 profit
Nov 10, 2015
Chow Tai Fook Jewellery Group Ltd, China's top jewellery retailer by market value, expects its first-half net profit to drop by up to 50 percent due to subdued spending in Hong Kong and Macau and disappointing sales of gold products.
Chow Tai Fook, which competes with global rivals such as Tiffany & Co and domestic firms such as Luk Fook Holdings International Ltd, on Tuesday forecast its net profit to fall by about 40 to 50 percent.
"The decrease is mainly attributable to the year-on-year decline in revenue brought about by weak consumer sentiment in Hong Kong and Macau," Chow Tai Fook said in a filing on the Hong Kong stock exchange.
The Hong Kong-based jeweller, reported a net profit of HK$2.7 billion ($348.33 million) in the first six months ending September a year earlier, according to previous statements.
Hong Kong retail sales fell for a seventh straight month in September as a drop in Chinese tourists and weak consumer sentiment amid a volatile stock market hurt retailers, the government said in early November.
Besides dismal consumer sentiment in its main markets, Chow Tai Fook also attributed the expected first-half profit decline to lower gross profit margins brought about by weak gold prices and hedging losses on gold loans.
The announcement came after the Hong Kong market closed on Tuesday. Chow Tai Fook's shares ended 0.6 percent lower, outperforming the Hang Seng Index's 1.4 percent fall.
$1 = 7.7512 Hong Kong dollars
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